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Citing low enrollment, Minnesota medical marijuana company delays 2 clinic openings

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ST. PAUL, Minnesota — Citing a need to keep costs down amid low patient enrollment, one of Minnesota's medical marijuana manufacturers announced Wednesday it's delaying its plans to open two more dispensaries this fall.

The decision by Minnesota Medical Solutions, or MinnMed, to push back its Moorhead clinic's opening until the spring of 2016 is a potential setback for patients in the western half of the state who will still face hours-long drives to the nearest dispensary in Minneapolis. The company also delayed a planned location in the western Twin Cities metro area until next spring.

State law requires the two manufacturers to open four dispensaries each by July 2016. Just three are currently open — MinnMed's facilities in Rochester and Minneapolis, and LeafLine Labs' Eagan clinic.

Both companies are grappling with low demand just two months since medical marijuana became legal in Minnesota. Despite initial projections that the program would eventually serve 5,000 patients, only 400 were cleared by the state to buy medical marijuana as of Thursday.

MinnMed chief executive Dr. Kyle Kingsley said the delaying the additional clinics will help keep costs down amid that slow enrollment. And the decision was reinforced by its experience at its first greater Minnesota clinic in Rochester, where Kingsley said they've handled "a fraction" of the patients they've seen in Minneapolis.

"It's hard from a business standpoint to justify opening" two additional clinics when relatively few patients are in the market for medical marijuana, he said.

The delay puts MinnMed's rollout more in line with its competitor. LeafLine aims to open a second branch in St. Cloud this fall, with locations in St. Paul and Hibbing coming sometime in 2016, CEO Manny Munson-Regala said.

But the decision also comes a month after MinnMed substantially raised its prices. Still, Kinglsey remained optimistic about the future of the state's program — and his company.

"Things take a while to reach critical mass," he said.

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